2 Simple ETFs You Can Buy for ,000 and Hold for Life

2 Simple ETFs You Can Buy for $1,000 and Hold for Life

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  • The Vanguard S&P 500 ETF (VOO) provides investors with exposure to some of America’s most influential companies.

  • VOO’s expense ratio is one of the lowest investors will find in the stock market.

  • The Schwab US Dividend Equity ETF has averaged a dividend yield of more than 3% over the past decade.

  • 10 Stocks We Like More Than the Vanguard S&P 500 ETF ›

When I ask someone why they don’t invest, a common response is “I don’t know how” or “It’s too complicated.” When I hear this, my usual response is that investing is far from complicated, especially when you’re investing in exchange-traded funds (ETFs).

ETFs simplify the investment process because you can own shares of multiple companies with one investment. They are simple and you don’t have to sacrifice valuable profits by relying on them in your stock portfolio.

If you have $1,000 to invest, you can achieve a solid portfolio with just a few ETFs. If this interests you, consider these two ETFs. Splitting $1,000 gives you comprehensive investment and proven performance.

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The Vanguard S&P 500 ETF (NYSEMKT: FLIGHT) reflects S&P 500 (SNPINDEX: ^GSPC)which is the most followed stock market index. The S&P 500 tracks the 500 largest and most influential American companies. Although it only includes large-cap companies, it is often used to gauge the overall state of the US stock market and economy.

Investing in VOOs gives investors access to the trifecta: diversification, blue chip stocks and low costs. While VOO is not as diversified as it has historically been due to rising technology valuations, it still manages to have companies that span all major US sectors.

The S&P 500 companies aren’t just your average companies, either. Many of them are industry leaders who have stood the test of time. There are exceptions to the latter when newer companies are included in the index, but generally the companies in the S&P 500 are proven and have a strong track record.

VOO has been a profitable investment for investors willing to hold it for the long term. Since the establishment of the ETF in 2010 annualized returns have averaged over 12% (up from 14% when dividends are reinvested), and if the US economy continues on the same trajectory it has been on for the past several decades, there is no reason to believe that this average return should fluctuate much over a longer investment period, preferably decades.

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